The U.S. Department of Labor has “serious concerns” about Fidelity Investments allowing investors to deposit bitcoin into their 401(k) accounts for retirement savings. A Labor Department official said it was risking Americans’ pension security, stressing that “cryptocurrencies can pose serious risks to retirement savings.”

US Department of Labor has ‘grave concerns’ about Fidelity’s Bitcoin 401(k) offering

The U.S. Department of Labor is deeply concerned about Fidelity Investments’ new offering that allows investors to put up to 20% of their 401(k) savings and contributions into Bitcoin (BTC). A 401(k) is a popular US job savings plan that offers tax benefits as an incentive to invest for retirement.

Ali Khawar, acting assistant secretary of the Labor Department’s Employee Benefits Security Administration, said in an interview with the Wall Street Journal on Friday:

We are seriously concerned about what Fidelity has done.

Khawar explained that the Department of Labor believes that allowing savers to put bitcoin in their 401(k) accounts by Fidelity is putting Americans’ pension security at risk.

The official said that he considers cryptocurrency to be speculative. There’s “a lot of hype about ‘You have to get in now or you’ll be left behind,'” he said.

Khawar wrote a blog post on the Labor Department’s website in March, raising concerns about pension plans investing in cryptocurrencies. He stated:

The US Department of Labor has serious concerns about the planned decisions to suspend participants from direct investments in cryptocurrencies or related products such as NFTs, coins and cryptoassets.

He explained that “cryptocurrencies can pose serious risks to retirement savings,” citing valuation challenges, price volatility, and the evolving regulatory landscape.

Do you think the US Department of Labor should be concerned about Fidelity allowing investors to put bitcoin on their 401(k) accounts? Let us know in the comment section below.

Kevin Helms

As an Austrian economics student, Kevin discovered Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open source systems, network effects and the interface between economics and cryptography.

photo credit: Shutterstock, Pixabay, WikiCommons

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